Market Report

Will borders China already close now ?


Tilburg, October 14th, 2018 

One of the big Chinese buyers has informed its suppliers that import licenses for China have been dried up and that this year no card board (occ) will be bought anymore for China. They would buy for other markets but the price would be much lower (a reduction of € 100 on the continent,  £ 100 in the UK. It is to be expected that other Chinese buyers will follow soon, at least where Europe is concerned. In the U.S., in the West, from where transit times are much shorter than from Europe, purchases against top prices will probably continue until the end of November. Reason why occ prices in export in the USA are still moving up a little. What can’t be bought (in time) anymore in Europe, will surely be bought in the U.S.  
This week a shipping line came with the information that recovered (waste) paper and card board would have been included in the ‘banned list’ by the Ministry of Environmental Protection inChina. It is hard to imagine that this would already happen now, but in case the information is correct, we would see a complete different market in the short term and not only for low(er) grades. Interesting how this will develop.
For the paper and board industry outside China this would be far from a disaster anyway. More outlets now that Chinese producers are limited due to raw material shortages and lower raw material on their home market caused by export limitations which will lead to oversupply. Who could ever have dreamed this ?  
Dreaming is continuing with regard to advantages and disadvantages after Brexit though. During the BIR convention in London the Brits were warned for the problems they could get with export of recovered paper (to the continent). Now you only needed to fill out an Annex VII and you could deliver recovered paper anywhere. After Brexit this would be different, so was said. Yes indeed, different, but not in the way as it was meant by the BIR. The Annex VII is not an import license or so. It is a waste transfer note enabling transport of recovered paper transborder within the EU (only) .  If you are not in the EU anymore you don’t have that nonsense anymore. North or South America, Africa or Russia, from anywhere outside the EU recovered paper can be delivered to any port anywhere in Europe without any (waste) transfer note. And also free from import duties.  
Again an example that people don’t have a clue what can and cannot happen after Brexit but at the same time are warning for consequences. Fake news. It is shocking that even the BIR does not know how it works with exports or imports. On the other hand not much of a surprise either. Most of the time there are people on the board who never exported recovered paper outside Europe themselves or imported some into the EU.

 

Imports China minus 51% Jan - Aug. 2018

In the first 8 months of this year up to and including August, China has imported 9.9 million tnnnes of recovered paper. This is 51% less than in the same period of 2017. Further info has not been given. But this is quite sufficient to get a feel of the impact of the Chinese measures with regard to the reduction of imports of recovered paper. The good news would almost be that despite the disappearance of outlet of such a big volume, the market for lower grades is still standing, being it with much lower prices than we could have expected when China would have continued to buy normally. Question is what will happen to the market when China closes the border completely latest by end of next year, as foreseen. Another 7 million tons available with no destination (yet) will surely show its effects. Only this when the indicated import figures are correct, of course.

Price indication

Price indications in Europe for low grades of recovered paper, sorted, baled and ex-works are now between € 50 and € 180 per ton. These prices are depending on quality, available volume, region and loaded weight.

Click here for the price chart, with prices of the last 10 years.

The price chart gives an indication of the price of mixed paper in the Netherlands free delivered mill over the last years.  Scrolling over the top of the colums gives the exact price indication in Euro's per ton.
To view the price chart completely, please click and hold on the price chart after opening and move cursor to left or right to see all available years/months